Brent Crude is currently trading at $59.3 a barrel (as of 9 January), around 14% lower than the same time last year.

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While some market experts, including those at Citi and SSGA, predict oil prices will “drift sideways” in 2019, others see the potential for a positive surprise.

Jeremy Podger, manager of the Fidelity Global Special Situations fund, said: “The oil price could surprise markets by remaining strong, or even rising further, either due to Middle Eastern issues (particularly around Iran) or, more happily, due to strong global demand. At this stage we are keeping a higher than average weight in the energy sector.”

Richard Robinson, manager of the Ashburton Global Energy fund, also expects a reversal in the correction, predicting a rise to $70-$80 over the coming three months.

“We believe the current pullback in the oil price during October and November – which are also the toughest months, seasonally – is transitional. This is, we believe, a bump in the road of cyclical recovery for oil,” he said.

In its 2019 outlook, Bank of America Merrill Lynch also forecasts Brent Crude prices to rise back to $70, while it sees WTI Crude at $59 a barrel.

‘Drifting sideways’

However, in its outlook for the coming year, SSGA pointed to the link between oil prices and inflation, predicting the price of oil will remain largely unchanged in 2019.

“Because of the extent and timing of the oil price decline, inflation in the advanced economies plunged to just 0.3% in 2015. Inflation has subsequently reaccelerated as oil prices have recovered. But it is projected to slow slightly next year as oil prices drift sideways while core inflation fails to accelerate appreciably,” the group said.

Anthony Rayner, co-manager of the Miton Multi Asset fund, sides with this view, seeing no change in the price of oil as geopolitical pressures are dampened by a need for compromise.

He said: “Oil will continue to be driven by supply, so geopolitics will play the key role, with expected slower economic growth only being a minor dampener on the price.

“Currently, the compromise between the key power brokers, the US and the Saudis, suggests a managed range not too far away from where we are now. Disorderly moves, up or down, are not beneficial for either of the two sides.”

At the same time, recent oversupply concerns have driven Goldman Sachs to drop its forecast for the year to an average of $62.5 a barrel from its previous forecast of $70, according to CNBC.

Going for gold

Meanwhile, gold is seeing increased demand amid continued uncertainty surrounding the trade relations between the US and China, as well as the UK’s exit from the European Union.